Auction Rate

If the market for auction-rate securities had been a bank, you would have said that it had suffered a run.

To see the system at work, look at auction-rate securities, a sort of long-term debt invented in the 1980s.

She said Cuomo should instead punish underwriters that deceived brokers on the safety of auction-rate debt.

Kari Stefansson, the firm's founder, points to the ill-judged investment of his firm's funds in risky American auction-rate securities.

Mr Robinson said that this cost BMS $600m when the auction rate note market collapsed in February 2008.

One of the e-mails' subject lines refers to "Interactive Data -- Auction Rate Security Advisory May 1, 2008. "

Why, then, should they believe that auction-rate securities are as good as cash?

"We will continue to aggressively investigate wrongdoing in the marketing and sale of auction-rate securities. "

I know that sounds dramatic. But, let me talk about what just happened to auction-rate securities.

The $330 billion market for auction-rate securities collapsed in mid-February.

Yet auction-rate securities were not regulated like banks.

Now, most auction-rate securities held by retail investors will be repurchased.

Problems in "auction-rate" securities [5] are causing even more alarm.

Deutsche Bank agreed to buy back $1 billion of auction-rate debt by mid-November and pay a $15 million penalty.